Audit Reports

Background

The OIG performed data analytics to identify offices with lost or stolen stamp stock shipments. We identified expenses regarding stamp stock shipments for the William Penn Annex between May 1, 2016, and April 30, 2017.

Stamp stock for mobile Point of Sale (mPOS)-William Penn Annex, Land Title Building, mPOS-Land Title Building, John Wanamaker Station, Continental Station, and B. Free Franklin Station is shipped to the William Penn Annex.

Stamp Fulfillment Services (SFS), Kansas City, MO, fulfills stamp orders from postal retail units. Retail units are responsible for identifying and locating missing stamp stock shipments. When retail units do not resolve discrepancies timely, Accounting Services records an expense to the units for the difference.

Management advised that they are strengthening overall stamp accountability and upgrading financial controls, including:

• Daily financial accountability reconciliations and semi-annual stamp counts at SFS.

• Enhancements to tracking stamp movement and in-transits at SFS; and stamp shipments to individual post offices.

• New tracking process and centralized review of all missing stamp stock shipments, including orders sent to the wrong unit.

• New stamp destruction process that better aligns and tracks inventory discrepancies.

The objective of this audit was to determine whether internal controls over stamp stock shipments were in place and effective at the William Penn Annex.

What the OIG Found

Internal controls over stamp stock shipments at the William Penn Annex and Continental Station needed improvement. Specifically:

• The supervisor at the William Penn Annex did not research, resolve, and document 35 of 110, or 32 percent, stamp stock shipment discrepancies valued at $50,279. In addition, a log was not maintained. The supervisor stated she was not aware of the unresolved discrepancies and did not maintain a log due to an oversight.

• One employee at the Continental Station received six stamp stock shipments but did not sign the stamp stock invoices. In addition, he received 34 stamp stock shipments, but did not have a witness verify the shipments. The employee did not sign the invoices because of an oversight, and he did not have a witness for verification because other duties took priority.

• The supervisor at the William Penn Annex could not locate the office’s June, July, and August 2016, daily financial reports. These records included supporting documentation for the office’s stamp stock shipments. The supervisor was unaware that the daily financial records were missing.

If controls over stamp stock shipments are not followed, there is an increased risk the financial records could be misstated and theft could occur without detection.

As a result of this audit, management began to research, resolve, and document the unit’s unresolved stamp stock shipment discrepancies. In addition, management reiterated the policy for proper verification of stamp stock shipments. Therefore, we will not make any recommendations for these issues.

What the OIG Recommended

We recommended management reiterate the requirement to maintain daily financial reports for at least two years.